"Lease to Own Agreement Template"

What Is a Lease to Own Agreement?

A Lease to Own Agreement is a type of Lease Agreement under which the tenant rents the property with the intention of buying it when the lease term runs out.

You can download a printable Lease to Own Agreement template via the link below.

Alternate Names:

  • Lease to Purchase Agreement;
  • Rent to Own Agreement.

Whether you are looking for a temporary lease with a later purchase or you cannot pay the full price of the house or apartment and prefer to pay in installments - this is the document for you. Once the lease term is up and you have paid the negotiated price, you become the new legal owner of the place - for residential or commercial purposes. Note that this contract legally obligates the renter to become a purchaser once the lease expires.

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How to Structure a Lease to Own Agreement?

Here is how you should complete a Lease to Own Agreement:

  1. Identify the parties to the contract - the individual or entity that owns the property in question and their counterpart that wishes to lease and then purchase the estate. You may only add the names and addresses of the parties, and it is up to you to write down more details such as driver's license numbers.
  2. Outline the lease portion of the deal. Just like in any other Lease Agreement, you need to describe the property, negotiate the amount of the rent (usually paid on the first day of each month), the term of the lease (not more than two or three years), and the security deposit to safeguard the property and the interests of the current owner. If the property comes with furniture and appliances, list them in the agreement or the separate document - the future tenant must check their condition before signing the papers and agreeing to accept the items in their present state. Determine which party will pay for the utilities and services, and who is responsible for the maintenance and routine repairs of the house or office space.
  3. State the sale and purchase terms. Confirm the tenant becomes the legal owner of the property once they have made enough lease payments and/or paid an additional sum of money considered to be a purchase price. Typically, the parties agree to keep the value of the estate the same despite inevitable changes in the housing market.
  4. Negotiate the potential termination of the agreement. If the tenant decides not to exercise their right to purchase property at the end of the lease, the contract should be flexible enough to allow them to convert it into a traditional lease agreement - or they may move out so that the landlord starts looking for another renter who will be willing to buy their property.
  5. Confirm you agree to all terms and conditions of the agreement, sign and date the document. Since this contract involves substantial sums of money, you may think about notarization to add an extra level of protection to your deal.

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Lease to Own Agreement
This Lease to Own Agreement (hereinafter referred to as the “Agreement”) is entered
into as of ___________________, by and between __________________________, with
a mailing address of _______________________________________________________
_________________________ (hereinafter referred to as the “Landlord” or “Seller”) and
__________________________, with a mailing address of ________________________
_______________________________________ (hereinafter referred to as the “Tenant”
or “Buyer”), collectively referred to as the “Parties,” both of whom agree to be bound by
this Agreement.
1. Description. The Landlord/Seller agrees to lease, and the Tenant/Buyer agrees to rent
the real property and improvements (hereinafter referred to as the “Property”) located at
____________________________________________________________________ and
more fully described as follows:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Property Description
2. Term. The term of this Lease shall be for a period of ________ months commencing
on ___________________ and ending on ___________________.
The term will be automatically extended for ________ periods of ________ months,
unless the Tenant/Buyer gives notice to the Landlord/Seller of its intent to terminate this
Lease, by mailing a written notice to the last provided address of the Landlord/Seller.
Liability for payment will not extend beyond notice to terminate this Agreement.
Possession shall be given to Tenant/Buyer on ___________________.
3. Rent. Tenant/Buyer agrees to pay to the Landlord/Seller, the monthly sum of
$___________________, with the first payment beginning ___________________ as
rent for the property, for the term of this Lease, and during any extensions thereof. All
rental payments shall be due and payable in advance on the ________ day of each and
every month. An amount equal to $___________________ for each month in which rent
was paid, shall be credited to the Tenant/Buyer and applied to the purchase price of the
property in the event that the Tenant/Buyer exercises its option hereunder; otherwise, this
credit shall be non-refundable and considered forfeited if the option is not exercised.
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Lease to Own Agreement
This Lease to Own Agreement (hereinafter referred to as the “Agreement”) is entered
into as of ___________________, by and between __________________________, with
a mailing address of _______________________________________________________
_________________________ (hereinafter referred to as the “Landlord” or “Seller”) and
__________________________, with a mailing address of ________________________
_______________________________________ (hereinafter referred to as the “Tenant”
or “Buyer”), collectively referred to as the “Parties,” both of whom agree to be bound by
this Agreement.
1. Description. The Landlord/Seller agrees to lease, and the Tenant/Buyer agrees to rent
the real property and improvements (hereinafter referred to as the “Property”) located at
____________________________________________________________________ and
more fully described as follows:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Property Description
2. Term. The term of this Lease shall be for a period of ________ months commencing
on ___________________ and ending on ___________________.
The term will be automatically extended for ________ periods of ________ months,
unless the Tenant/Buyer gives notice to the Landlord/Seller of its intent to terminate this
Lease, by mailing a written notice to the last provided address of the Landlord/Seller.
Liability for payment will not extend beyond notice to terminate this Agreement.
Possession shall be given to Tenant/Buyer on ___________________.
3. Rent. Tenant/Buyer agrees to pay to the Landlord/Seller, the monthly sum of
$___________________, with the first payment beginning ___________________ as
rent for the property, for the term of this Lease, and during any extensions thereof. All
rental payments shall be due and payable in advance on the ________ day of each and
every month. An amount equal to $___________________ for each month in which rent
was paid, shall be credited to the Tenant/Buyer and applied to the purchase price of the
property in the event that the Tenant/Buyer exercises its option hereunder; otherwise, this
credit shall be non-refundable and considered forfeited if the option is not exercised.
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4. Option to Purchase. The Tenant/Buyer, as part of the consideration herein, is hereby
granted the exclusive right, option and privilege of purchasing property at any time
during the term of this Agreement or any extension thereof.
The Tenant/Buyer shall notify the Landlord/Seller in writing of the exercise of this option
at least ________ days prior to the expiration of the initial term of this Lease or the
expiration of any extension thereof, by mail to the last-provided address of
Landlord/Seller.
5. Covenants of Tenant/Buyer. Commencing with and during the term of this
Agreement, including extensions, the Tenant/Buyer hereby covenants and agrees as
follows:
● That the Tenant/Buyer will pay all utility charges and bills, including, but not
limited to, water, sewer, gas, oil, and electric, which may be assessed or charged
against the property;
● That the Tenant/Buyer will not use the property for any unlawful purpose; and that
the Tenant/Buyer will conform to and obey all laws, ordinances, rules, regulations,
requirements and orders of all Federal, Stale, and Local governmental authorities,
agencies, departments, bureaus, boards or officials, respecting the use of the
property;
● That the Tenant/Buyer will surrender and deliver up the property, at the end of the
term or any extensions thereof, should the option herein not be exercised, in as
good order and condition as the same now exists, reasonable use and natural wear
and tear excepted.
6. Covenants of Landlord/Seller. The Landlord/Seller hereby covenants and agrees as
follows:
● That the Landlord/Seller shall pay for and maintain fire and extended coverage
insurance on said property in the minimum amount of $___________________;
● The Tenant/Buyer shall be named as an additional insured or loss-payee on the
insurance policy and copy of which shall be provided to Tenant/Buyer;
● That the Tenant/Buyer shall peaceably and quietly hold, occupy, use and enjoy the
property, without any let, hindrance or molestation by Landlord/Seller or any
person associated therewith.
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7. Breach by Tenant/Buyer. If the Tenant/Buyer shall fail to keep and perform any of the
covenants, agreements, or provisions of this Lease, or if the Tenant/Buyer shall abandon
the property; it shall be lawful for the Landlord/Seller to enter into said property and
again have, repossess, and enjoy the same as if this Lease had not been made, and
thereupon this Lease and everything herein contained on the part of the Landlord/Seller
to be done and performed shall cease, determine and be utterly void. The commencement
of a proceeding or suit in forcible entry and detainer or in ejectment, or otherwise after
any default by the Tenant/Buyer, shall be equivalent in every respect to actual entry by
the Landlord/Seller.
8. Costs of Improvements. In the event the Tenant/Buyer exercises the option to
purchase set forth in Section 4, above, and through no fault of the Tenant/Buyer, the
Landlord/Seller fails to convey said property to Tenant/Buyer In accordance with the
terms of this Lease, the Tenant/Buyer, in addition to any other rights which Tenant/Buyer
may have in law or equity for the enforcement of Tenant/Buyer's option to purchase, shall
be entitled to reimbursement for the cost of all repairs, maintenance and improvements.
9. Further Encumbrances. The Landlord/Seller hereby warrants that the total of the
leases, options, mortgages, liens, and any other encumbrances against the property,
whether of public record or not, are as follows:
● A
first
mortgage
in
favor
of
in
the
approximate
amount
of
$___________________.
● Current taxes for ________ in the amount of $___________________ due on
___________________.
The Landlord/Seller agrees not to lease to another third party, nor to assign, sell, option,
transfer, pledge or otherwise to convey any or all rights or interests had by
Landlord/Seller in the property or in this Agreement, nor to further encumber the
property nor allow the same to occur. All third parties are hereby put on notice that any
leases, assignments by the Landlord/Seller, liens, options, mortgages or any other
conveyances or transfers occurring subsequent to the date of this Lease are hereby
declared by the Landlord/Seller to be null and void and of no force and effect.
The Landlord/Seller further agrees to keep all mortgages, liens, taxes or other
encumbrances on the property, current and in good standing. Tenant/Buyer shall have the
right to make payments on same in the event that Landlord/Seller becomes non-current or
other-wise defaults thereon and said payments will be deducted from any equity due
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seller or recovered from future rent due seller. Current taxes for ________ in the amount
of $___________________ due on ___________________.
The Landlord/Seller agrees not to lease to another third party, nor to assign, sell, option,
transfer, pledge or otherwise to convey any or all rights or interests had by
Landlord/Seller in the property or in this Agreement, nor to further encumber the
property nor allow the same to occur. All third parties are hereby put on notice that any
leases, assignments by the Landlord/Seller, liens, options, mortgages or any other
conveyances or transfers occurring subsequent to the date of this Lease are hereby
declared by the Landlord/Seller to be null and void and of no force and effect.
The Landlord/Seller further agrees to keep all mortgages, liens, taxes or other
encumbrances on the property, current and in good standing. Tenant/Buyer shall have the
right to make payments on same in the event that Landlord/Seller becomes non-current or
other-wise defaults thereon and said payments will be deducted from any equity due
seller or recovered from future rent due seller.
10. Right of Assignment. The Tenant/Buyer shall have the unqualified right to sublet the
property, and/or to assign, sell, transfer, pledge or otherwise convey any or all rights or
interests which the Tenant/Buyer may have in the property or in this Agreement. Any
such assignment will release original Tenant/Buyer from liability and substitute assignee
in his/her or its place.
11. Maintenance and Repairs. The Tenant/Buyer accepts the property “as is" on the date
of execution of this Lease. The Tenant/Buyer shall henceforth be responsible for all
maintenance and repair upon said property, both interior and exterior. The Tenant/Buyer
shall have the right to make such repairs, maintenance, and improvements as
Tenant/Buyer shall deem necessary proper or desirable. The Tenant/Buyer shall be solely
liable for payment for said improvements and shall hold the Landlord/Seller nameless
there from, except that any electric, plumbing, heating or cooling system that is out of
order or any repairs exceeding $___________________ at the commencement of this
lease or within ________ days thereafter will be repaired by the landlord/Seller at his/her
expense.
If the landlord/Seller cannot or will not make the repairs necessary the Tenant/Buyer will
have the option of either voiding this Agreement by written notice to the landlord/Seller
or making such repairs and, a) receiving a reimbursement from the next monthly payment
or payments due the Landlord/Seller or, b) receiving a credit against the purchase price
plus interest at 10% per annum from date of payment.
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12. Binding Agreements. The parties hereto agree that this Lease comprises the entire
agreement of the parties and that no other representation or agreements have been made
or relied upon, and that this Agreement shall inure to the benefit of arid shall be binding
upon the parties, their heirs, executors, administrators, personal representatives,
successors or assigns.
13. Special Provisions. The Landlord/Seller will complete the following by
___________________ or this Lease will become null and void and all monies disbursed
by Tenant/Buyer will be immediately refunded by Landlord/Seller or, at Tenant/Buyers
option, these items will be completed by Tenant/Buyer and the cost of same will be
recovered as provided for in Section 11 in which case this lease will continue in force.
Other provisions:_________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
14. Price and Terms. The Tenant/Buyer agrees to pay for said property the sum of
$___________________ less any sums for which the Tenant/Buyer is entitled to claim
reimbursement or offset in accordance with this Agreement; the net sum to be paid in
cash, certified check, or cashier’s check at closing.
15. Included in the Purchase. The property shall also include all land, together with all
improvements thereon, all appurtenant rights, privileges, easements, buildings, fixtures,
heating, electrical, plumbing and air conditioning fixtures and facilities, window shades,
venetian blinds, awnings, curtain rods, screens, storm windows and doors, affixed
mirrors, wall to wall carpeting, stair carpeting, built in kitchen appliances, bath-room
fixtures, radio and television aerials, landscaping and shrubbery, water softeners, garage
door openers and operating devices, and all utility or storage buildings or sheds, range
and refrigerator. The property shall also include the following items:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
16. Title. The Landlord/Seller shall convey marketable title to the property with the
above described inclusions, by good and sufficient General Warranty Deed in fee simple
absolute, on or before closing; said title to be free, clear, and unencumbered except
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